26.1.16

Of growing Retail Participation in Mutual Funds....


Growing retail participation for the fifth straight quarter helped mutual funds (MFs) close 2015 with their highest ever folios, or the number of investor accounts, of 4.6 crore. The year saw an addition of 55.8 lakh folios, a 13.8% year-on-year (y-oy) increase. Retail folios stood at 4.4 crore, a 13% y-o-y growth or addition of 50.7 lakh investor accounts. Despite market volatility , equity-oriented funds got a lion's share of retail investor accounts. Retail folios in the segment went up 13.3% y-o-y , or an increase of 39.5 lakh folios, to 3.4 crore, data with the Association of Mutual Funds in India showed. In comparison, the Nifty 50 index was down 4% in 2015.
The MF industry added about 14.1 lakh investor accounts for the quarter ended December, up 3.2% on a quarter-on-quarter (q-o-q) basis.Of this, retail accounted for 12.9 lakh folios. This was lower than the 15.1 lakh accounts added in the quarter ended September.
High net worth individuals (HNIs), or those investing Rs.5 lakh or more, preferred MFs. The HNI segment recorded an absolute rise of nearly 4 lakh folios in 2015, pushing its total base to 17.2 lakh. Equity, balanced and debt MF categories attracted HNIs the most on both yearly and quarterly basis, data compiled by ratings agency Crisil showed.
The penchant for equity investments also benefited balanced funds as the category added 4.6 lakh folios, up 24.1% y-o-y. Folios in balanced funds improved 5.7% q-o-q or by 1.3 lakh to end 2015 at 23.5 lakh.
The share of debt funds in MF folios improved a notch to 16.4% for the quarter ended December from 16.1% at the end of September. The category logged the fourth consecutive quarterly rise, adding nearly 4 lakh folios to take the tally to 75.3 lakh. This included addition of 3.7 lakh retail folios.
Folio closures in gold exchange traded funds (ETFs) continued for the fourth consecutive quarter as subdued performance by the underlying asset put investors off. Gold ETFs had 4.5 investor accounts at the end of December.Tenure-wise analysis of assets under management (AUM) across investor types and categories showed that 54.6% of retail AUM stayed in equity MFs for more than two years.

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